Hedge fund transformation could benefit investors: Ernst & Young
Financial crisis has increased transparency, improved governance
In Weathering the storm, respondents from 100 of the world's largest hedge funds cited recent increases in transparency and governance as dramatic improvements for hedge fund investors.
"As a part of the North American hedge fund industry, the trends in
However, the survey does highlight some areas of concern, such as managers' opinions about increased regulatory oversight and further consolidation of the industry.
"The managers we interviewed understand there will be stricter regulatory oversight, and they're preparing for it. The concern is really about the uncertainty around the form and depth of regulation and the associated costs," explains Chin. "We'll have to see how things evolve in time."
Overall, the survey found the crisis has forced a number of dramatic changes on the industry since the beginning of 2009. Among them:
- One in four managers lowered fees because of investor pressure, with nearly 50% having done so to entice new capital. - Almost 30% imposed gates or suspensions on redemptions during the crisis, but they remain optimistic their actions will not have a negative impact on their ability to maintain or raise capital. - Forty percent of managers interviewed changed liquidity terms. - Thirty-eight percent made changes to investor reporting. - Twenty-seven percent adapted their risk management approach.
"Much has changed in the last 18 months for hedge funds in
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For further information: Amanda Olliver, [email protected], (416) 943-7121; Brooke McLachlan, [email protected], (604) 899-3597; Marie-Ève Graniero, [email protected], (514) 874-4313
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